Ghana’s Finance Minister, Ken Ofori-Atta, has delivered the 2024 budget statement to Parliament, highlighting the government’s efforts to restore economic growth and create more jobs.
Ofori-Atta attributed the ongoing economic recovery to robust fiscal and monetary policy measures implemented since the previous year, emphasizing the resilience of growth, declining inflation, improved fiscal and external balances, and stabilized exchange rates.
The Finance Minister underscored the government’s commitment to maintaining discipline for economic stability, citing the successful completion of the first review of the 3-year, $3 billion International Monetary Fund External Credit Facility (IMF-ECF) program as a significant milestone.
“So far, growth in 2023 has been more resilient than expected, inflation has declined in line with the fundamentals, the fiscal and external balances have improved, and the exchange rate has stabilized. We turned the corner when inflation started declining from 54 1 in December to 35.2 in October 2023.”
Ken Ofori Atta
“The recovery is indeed real and is here to stay,” he further stressed.
Ofori-Atta assured Parliament that the government aims to sustain stability, foster increased growth, and ensure currency stability, highlighting the real and enduring nature of the ongoing economic recovery.
As part of fiscal measures, the government announced the waiver of import duties on electric vehicles (EVs) designated for public transportation for eight years. Additionally, import duties for semi-knocked down and completely knocked down EVs by registered assembly companies will also be exempted for the same period. To promote menstrual hygiene and affordability, all locally produced sanitary pads will be zero-rated.
Waivers On Expansions
The Finance Minister prioritized several reliefs for implementation, including extending the zero rate of VAT on locally manufactured African prints, waiving import duties on electric vehicles, and extending the zero rate of VAT on locally assembled vehicles for two more years. Furthermore, a VAT flat rate of 5 percent will replace the 15 percent standard VAT rate on all commercial properties to simplify administration.
To address environmental concerns, the government will review and expand the Environmental Excise Duty to cover plastic packaging, industrial emissions, and vehicle emissions. These initiatives aim to curb plastic waste and pollution.
Ofori-Atta expressed optimism about Ghana’s economic trajectory, highlighting key indicators such as declining inflation, improved currency performance, and increased profitability in the banking industry. He emphasized that the recovery is real and backed by restored confidence, improved revenues, and companies reentering the job market.
“The performance of the Cedi is also a reflection that confidence is back, revenues have improved, and that the recovery is indeed real and here to stay. We turned the corner when companies went back to the job market to hire workers, and we turned the corner when the banking industry started to record and report profits after-tax growth of GH¢6.2 billion this half-year.”
Ken Ofori Atta
The Finance Minister defended the government’s economic progress, citing a significant reduction in inflation from 54.1 percent in December 2022 to 35.2 percent in October 2023. He noted the currency’s modest depreciation of 6.4 percent over nine months, compared to 53.3 percent in the same period in 2022.
Addressing environmental challenges, Ofori-Atta disclosed a budget allocation of GH¢220 million to support communities affected by the Akosombo spillage and floods.
“Mr. Speaker, the Government has budgeted an amount of GH¢220 million to support the relief phase for the communities affected by the Akosombo spillage as well as floods upstream in the Oti, Savannah, and Bono-East Regions.”
Ken Ofori Atta
The relief phase aims to provide immediate support, while the restoration phase, with World Bank funding, will focus on rebuilding livelihoods and infrastructure. The 2024 budget presentation outlines the government’s commitment to economic recovery, fiscal responsibility, and sustainable development.
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